Location still matters: Evidence from an online shopping field experiment
by John Morgan, David Ong∗, Zemin (Zachary) Zhong
ARTICLE | Journal of Economic Behavior & Organization | Vol. 146, 2018
Abstract
Many empirical studies of online price dispersion show that sellers post different prices for homogeneous goods. However, seller heterogeneity is difficult to control for and posted prices may not reflect price dispersion in actual transactions. We contribute to this literature by selling identical simple goods (cell phone credits) at different prices from sellers that were identical except in name and with minimal ratings. The only way consumers could find us in this extremely thick market is to rank by price from lowest to highest. Out of 514 sales, 73 were of the higher priced item, for which we had non-negligible demand even when the price gap was 2%. Thus, even this selected sample of price-sensitive consumers do not necessarily buy the lowest priced item, all else being equal. Using independent variation in screen
location and price, we are able to distinguish for the first time between search cost
and limited attention based price dispersion.
Popular Articles
-
International Student Profile: Kevin Kurnia
Oct 12 2017
-
PHBS Opening a Campus in UK: Se...
Feb 22 2017
-
PHBSers: Wishing You a Better Year Ahead!
Dec 30 2016
Latest News
-
Yeujun Yoon: Rise to Challenges and Find the True Calling
Time:Feb 23 2018
-
PHBS Exchange Students: Heavier Luggage, Fuller Hearts
Time:Jan 23 2018
-
PHBS 2018 Winter Camp: When Pyth...
Time:Jan 23 2018
Campus Events